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Blow to housing hopes as housebuilding falls

Friday, 18 November 2011 3:21 PM

Fewer new homes were built in England in the three months to the end of September than in any quarter for at least 20 years.

The new figures were published by the Department for Communities and Local Government (DCLG) yesterday and paint a gloomy picture ahead of the publication of the government's new housing strategy expected on Monday.

Housing completions totalled just 24,350, the second successive quarterly fall. The total was down 13 per cent on the second quarter and three per cent on a year ago and was even below the previous low point reached in early 2010. This was the lowest quarterly total in figures that go back to 1990.

Housing starts continued to fall too. The total of 24,350 was down six per cent on the previous quarter and 10 per cent on a year ago. However, this was still higher than the low point of just 14,650 in the final quarter of 2008.

Annual housing starts totalled 96,070 in the 12 months to September, down seven per cent on the year to September 2010. Completions totalled 106,000 over the year, which was down by two per cent.

The worrying thing is that housebuilding had been recovering from the slump it went through in the wake of the credit crunch but now seems to be falling once more.

Jack Dromey, Labour's shadow housing minister, said: "House building is falling, which is yet more bad news for first time buyers struggling to find a home, the people on housing waiting lists and those paying rising rents in the private rented sector.

"In September last year, Grant Shapps [housing minister] said building more homes is the gold standard upon which the government would be judged. Well, the judgement is in and the government is failing."

Experts say England needs up to 240,000 new homes a year to accommodate new households. The Federation of Master Builders forecast in a report earlier this week that demand would outstrip supply by 500,000 homes by 2015 – the equivalent of a city the size of Birmingham.

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